During a meeting of the Knesset Finance Committee on Tuesday, the Treasury`s chief economist, Dr. Michael Sarel, presented an optimistic forecast with regards to the unemployment rate in Israel.
According to figures he presented during an assessment of the economy`s performance, the expected average unemployment rate for 2013-2014 will stand at 6.2%. The data further indicated that Israeli exports are expected to increase and have a positive effect on employment, due, among other things, to the expected growth in global trade. Committee members asked the Treasury officials to explain the discrepancies between their economic forecast and that of the Bank of Israel. In response, the Treasury officials said their forecast was more updated.
The data presented by Sarel showed that the past decade mostly saw positive economic growth, apart from a few quarters at the beginning of the decade, as well as during the Second Lebanon War and the global crisis of 2009. The rate of participation in the job market in 2013 stands at 63.5%-63.9%, while the unemployment rate was 6.5% in January 2013 and 5.9% in October of this year.
According to Sarel, global trade will increase from 2.9% in 2013 to 4.9% in 2014, 5.4% in 2015 and 5.9% in 2018. ”This may have a positive influence on Israeli exports, and thus on employment and growth as well,” the chief economist said.
Budget Division Director Amir Levy also presented an optimistic forecast which sees Israel`s growth rate rising to 3.6% in 2013 from 3.4% in 2012. However, the Treasury predicts the growth rate will slow to 3.1% in 2014. According to the updated forecast, Israel`s economic growth will stand at 3.6% in 2013 and 3.1% in 2014.